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FAQ: Can you lower the $400 approval threshold for repairs?

landlord repairsCan we lower the approval threshold for repairs below $400? The short answer is: No. Landlords are always concerned about repair costs. Some property owners ask if we can lower our approval threshold for repairs. This seems like a good idea because it would allow the owner more control over repair costs, by approving every repair over $200, for example. However, this is a terrible idea, and I’ll explain the reasons in more detail here.

Tenants hate it

Every time we have to send a vendor to get an estimate and then wait for owner approval, tenants have to wait longer and put up with more vendor visits. No one likes that. The top two reasons tenants move are rent increases and poor maintenance handling. When tenants get tired of extra visits and repair delays, they will move, causing a vacancy. The goal is to minimize the landlord’s costs, and one way we do that is by getting repairs done as quickly as possible. Vacancy is expensive. We don’t want unnecessary vacancy due to excessive repair delays. Furthermore, believe it or not, the rental business is a customer service business. Expecting tenants to “suck it up” because the landlord wants to cheap out on repairs, is bad business.

Vendors hate it

When we have to get estimates for owner approval on small repair items, this costs the vendors extra time by making them do 2 trips for a small repair. Every trip costs them time and money. If we did this, vendors would either stop working with us, or raise prices to compensate for the extra work.

In addition, we can often get better rates and better service by building relationships with good vendors and giving them regular business. We cannot do that if we waste their time with extra trips. There is no such thing as a truly free estimate. A small vendor has to spend his time and vehicle cost doing that instead of paid work. A company has to pay employees to do estimates. Even if a vendor claims to offer free estimates, they are baking that cost into their service rates. You will pay for it in the end.

It costs us extra money

Adding an extra step to a process is costly. Every time we have to submit an estimate for landlord approval, it adds more work on our end. If the client doesn’t respond in a timely manner, then we have to spend more time following up. This costs us more money. If we must perform extra work for one client, then we must charge them for it.

Extra repair approvals cost the landlord more money

One way or another, requiring landlord approval for small repairs will ultimately cost more money. It creates more work for service providers. That extra cost will have to get passed on to the landlord. It is also much more likely to cause increased vacancy rates. Extra turnovers can eat up all your profit. Unless your reason for owning rental properties is to use them as a tax write off, it’s better to let your property manager do their job to help minimize your costs! To help save everyone wasted time and money, our approval threshold for repairs will never go below our standard $400. This means if a repair will cost up to $400, we can just get it done; if it will cost more than that, we will seek approval from the landlord first (unless it is an emergency).